Sunday, November 23, 2008

Some Things To Think About As The Week Begins

We are in a situation that, indeed, has a precedent. After being elected in November of 1932, Franklin Roosevelt have four months until he was inaugurated. Those four months were among the worst of the Depression. There was violence in Iowa, Minnesota, and Mississippi. First cities - Chicago was the first to go - then whole states went bankrupt. Herbert Hoover implored the President-elect to jump on board any plan he might have to mitigate the disaster, but Roosevelt did nothing. He demurred at each imploring telegram, each letter entreating him to do or say something. It enraged Hoover, baffled many of FDR's supporters, and sent the country spinning even further out of control. While long on rhetoric, the "New Deal" promises that Roosevelt spoke of during the campaign were, like Obama's talk of hope (at least according to his detractors) short on substance. Roosevelt just sat, his cigarette holder in his teeth, smiling his Cheshire cat smile, and waited until March 4.

As it was seventy-six years ago, so it is now. Now, our current President isn't doing much to address the situation, because he hasn't done much more than create the situation in the first place. I really don't want him "leading" because it will only make matters worse. His Secretary of the Treasury, the face of the Administration's attempts to deal with our current mess, has had little success, if for no other reason than he is attempting to stop a locomotive by standing on the tracks with his arms held out.

According to Josh Marshall, Obama will be introducing his economic team tomorrow morning at a press conference in Chicago. As Crooks and Liars is reporting, it seems Obama is listening to progressives, at least insofar as domestic fiscal policy is concerned. A report by Campaign for America's Future has a great line with which it begins:
America is falling apart. Falling apart, and falling behind.

Previous generations of Americans built interstate highways and transcontinental railroads. Now we sit in traffic.

The report continues directly, countering the decades-long conservative myth that it was private investment and initiative that made America great by citing real history:
Americans from an earlier era pioneered universal primary education and chartered great universities on public land. They enacted the G.I. bill to give the greatest generation the access to college that helped build our modern middle class. Nowadays American students toil in overcrowded classrooms with leaky roofs, while the cost of college soars out of reach.

America grew up investing in its land and its people. Historically, we directed roughly 8 percent of our gross domestic product to long-range investments, and the investment paid off. Now we are down below 4 percent. Our post World War II infrastructure is starting to decay, and we aren’t replacing it. We are lamenting the loss of jobs rather than hiring people to renew and rebuild.

Killing two birds with one stone, Pres.-elect Obama said the following in his weekly video address:
I have already directed my economic team to come up with an Economic Recovery Plan that will mean 2.5 million more jobs by January of 2011 — a plan big enough to meet the challenges we face that I intend to sign soon after taking office. We’ll be working out the details in the weeks ahead, but it will be a two-year, nationwide effort to jumpstart job creation in America and lay the foundation for a strong and growing economy. We’ll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children, and building wind farms and solar panels; fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead.

These aren’t just steps to pull ourselves out of this immediate crisis; these are the long-term investments in our economic future that have been ignored for far too long. And they represent an early down payment on the type of reform my administration will bring to Washington — a government that spends wisely, focuses on what works, and puts the public interest ahead of the same special interests that have come to dominate our politics.

I believe he was as forthright as this because last week, the markets were as volatile as at any point since this whole mess began back in September. While it is true there isn't anything Obama can do between now and January 20 that is of real substance, by announcing a general outline of his plans, he can reassure jittery investors that he seems to know what he is doing.

This is directly related, in many ways, to another issue that has caused some consternation across the political spectrum - the way Obama is assembling his cabinet, and the people he has chosen to fill various offices. I have written about this before and all I have to say is a repeat of what I've said before. Regardless of the individual put in whatever office, this will be Obama's cabinet. They will either carry out the President's policy, or they will find gainful employment elsewhere. Obama, I do believe, is quite sure of what he will do once he takes office. His announcement during his video address yesterday shows that pretty clearly. I think that the people being put in place right now have been told, as politely as possible, that this is Obama's bus, and to ride, they have to follow his rules. Putting various people, whether it's Bill Richardson at Commerce, Hillary Clinton at State, or Timothy Geithner at Treasury, in place may put a reassuring face, or a series of mundane faces, on his cabinet. Unlike other Presidents, however, at least at this particular moment, I think they are all going to play the game Obama's way - regardless of their own preferences; regardless of any ideas of their own - or not play at all.

Matt Yglesias puts it in a slightly different way, but I think the meaning is the same:
Putting reassuring faces on an agenda of ambitious policy change strikes me as dramatically preferable to appointing a lot of liberals whose job is to sell the progressive base on the need to trim and abandon campaign commitments.

Jockeying for jobs is a very important part of life for DC insiders, and I would never deny that I’d strongly prefer to see my various friends and acquaintances get choice positions than see the reverse happen, but in the real world its the policies that matter. If universal health care, a clean energy economy, withdrawal of troops from Iraq, an end to torture, and massive new infrastructure investments are a “center-right” agenda because Tim Geithner is Secretary of Treausry then I’ll take it. The crux of the matter is to keep pressing for the agenda.

This week should be interesting, because last Sunday night, I don't think anyone expected the markets to tumble the way they did. With Citigroup on the verge of implosion, and the debate/discussion over a Detroit bailout still ongoing, this is no time to play around. The moves Obama has made so far have caused consternation and confusion, but I am convinced they are the right moves at this particular moment. We shall see how the markets react to Obama's promise to actually do stuff once he's inaugurated, regardless of the various friendly faces around his cabinet table.

One final note. I think that, while there is nothing the new Congress will be able to do on Obama's announced plan until after the inauguration (it is seated soon after the new year, before the swearing-in), I have no doubt a draft plan will be on the desk of each member of Congress before boxes are unpacked. By the time January 21, 2009 dawns, the legislation will have sponsors, and, unless the Democrats have a death-wish, it will pass, in all likelihood, as quickly as possible.

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